MUMBAI, February 6: About 20 foreign insurance companies that have set up shops in India over the last couple of years are hoping against hope that the sector would be thrown open to them despite the fact that the manifestoes of all the three major political parties are non-committal about the future of the sector.None of the major national political parties, including the Congress, the Bharatiya Janata Party and the United Front, have allowed these companies to operate independently so far. However, these foreign companies have refused to back out. ``In the whole world, the political parties say something in their manifestoes to fight the elections and do something else when they assume power,'' said the chief executive of a prominent foreign insurance company. These companies expect that the Insurance Regulatory Authority Bill, giving statutory power to the existing IRA, will be passed once the new government is in place.
``One can only be clear about the state of affairs about anything in India afterthe new government is formed,'' said John H Chambreau, chief executive (India), American International Group, one of the world's largest insurance companies. AIG, which is extremely bullish on India, has an extensive investment plan for its ongoing activities, he said. It has recently tied up with Tata Sons to take the plunge into the insurance business.
"More than the insurance sector liberalisation, we are interested in the formation of a stable government," said John Brice, representative of the UK-based General Accident Insurance in India. According to Brice, indications about the insurance sector reforms so far have been positive and there is nothing to discourage his institution to undertake expected business in the future.
The company has a tie-up with Nusli Wadia-owned Bombay Dyeing to undertake the insurance business. He is also hopeful that the IRA Bill will be in place once the new government takes over.
The Congress -- the chief architect of financial sector reforms -- has said in itsmanifesto that foreign companies can operate in India only through a joint venture with a domestic private company.
The BJP, which had blocked the IRA Bill in the last monsoon session of parliament as it was opposing foreign companies' entry in the domestic market, has said in its manifesto that only private domestic companies will be allowed to operate along with the public sector companies.
The United Front, which had suffered a setback while passing the IRA Bill in the Lok Sabha, is silent over the insurance sector reforms. Janata Dal, a prominent constituent of the United Front government, has gone back on its earlier words and said that it does not favour any insurance sector reforms.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
